Good morning from Suominen's head office in Espoo, and welcome to this webcast about Suominen's planned rights issue. My name is Anu Ilvonen. I am the Director of Communications here at Suominen, and I will be hosting and facilitating this webcast. This presentation is intended solely for qualified investors in permitted jurisdiction, and it doesn't constitute an offer in solicitation to buy or sell securities. It also contains some forward-looking statements and involve risks and uncertainties, and recipients should rely only on their own independent analysis of the company. Joining me today for this webcast is our President and CEO, Charles Héaulmé . Good morning, Charles.
Good morning.
Our brand new CFO, Kimmo Raunio.
Good morning.
Our former CFO, now Delegate Transition Leader, Janne Silonsaari .
Good morning.
On our agenda, we have the introduction to Suominen, then Charles will talk about Suominen's Full Potential Program and then, of course, about the contemplated rights issue. Without further ado, Charles, the floor is yours.
Thank you, Anu. Good morning to all of you and welcome to this session and thank you for joining us. I would like to, first of all, as Anu was explaining, introduce Suominen as a company before taking you through the other section of our session. Suominen is a leader in the nonwoven industry, and it means that we are basically producing and supplying to our customers nonwoven goods as rolls that our customers, mainly converters, are converting into wipes and other applications using nonwoven. We are known in this industry as a leader in nonwoven innovations for sustainability, particularly.
We have reached a level of EUR 412 million in terms of revenues in 2025 with an EBITDA margin of 3% and EUR 12.6 million comparable EBITDA in 2025 with approximately 700 employees, precisely 672. We have a relatively strong innovation in our portfolio with a share of new products in the total of sales of 27%. Where are we operating in the world? Well, I would say we are operating exactly in the right markets when it comes to sustainability first, when it comes to search for convenience, sorry, and for growth, also profitable growth in the world of nonwoven.
We are operating basically in Americas and in Europe, Middle East, Africa, with manufacturing operations in U.S.A., particularly with three factories and almost 300 employees. We have also a production unit in Brazil, which is supplying, number one, the Brazilian market, but also a bit the Latin American markets, but mainly Brazil at this point. Then three factories in Europe, one in Spain, in Alicante, one in Italy, near Milano, and then one in Finland, in Nakkila. As Anu was saying, our head office is in Espoo in Finland. Very much a global company in nonwoven, operating close to customers in very relevant markets. That drives me to explain you also a bit more in detail what I was meaning with we are an innovation leader in this industry of nonwoven.
Well, the innovation is primarily for convenience. We see more and more demand for convenience and for more hygiene in the world and the recent pandemic in 2020, 2021 was there to remind the importance of hygiene for personal use, for home use, and all other industrial use. The second trend that is really important in this industry is the sustainability trend. There, Suominen is very clearly a pioneer in sustainable products. It actually started 20 years ago or almost 20 years ago in 2007 with the launch of our first sustainable product portfolio under the brand name BIOLACE. We also launched, invented in the market the disposable wet-laid spunlace category for MTT. MTT stands for moisturized toilet tissue.
This is an extremely relevant category because this is the one that is most growing in the mature world, if I may say, particularly growing very rapidly in the U.S., but also in Europe from a much lower base. Why are we an innovation leader? We believe strongly into sustainability. We believe into bringing convenience to consumers, but we believe also into hygiene, more hygiene. Therefore, we have developed over time a strong R&D leg into the company, a capability that is basically across all our different operations. We have a global management of R&D, but with local applications. We have 13 R&D professionals. We have two pilot lines, which means that we also co-develop and offer co-development to our and co-testing to our customers.
For instance, we are one of the most advanced in pulp, in fiber solutions, and we offer to our customers testing new applications with them. As I said, we have capabilities for R&D basically in all our seven plants with particularly this pulp capability that is extremely important as we are engaging strongly on the sustainability with pulp renewable materials. Summarizing Suominen today in couple of words. Suominen as an investment, I would say is summarized in four really important points. First of all, we are in a resilient, growing market with low-cost competition however. Second, we have, as I said, a leadership position.
Third, we are at a turning point where we have renewed or changed our operating model, we have renewed our company management, and we have reset our strategic focus. Point four, we have a comprehensive Full Potential Program that has been launched at the end of January this year in order to deliver much higher profitability than we have been delivering in the recent past. What do I mean with resilient growing market? Well, this market has underlying growth because of the trends I was explaining before, the need for convenience. First of all, the demographic trend also. With demography, I don't mean only population growth, but also middle class growth. The middle class is really the consumers that are driving the growth in these kind of categories. That creates solid tailwinds.
Second, we have also the search for more hygiene, more convenient and more sustainability. At the same time, we see a production rising from low-cost countries, with today a relative overcapacity when we look globally at the entire global map of the nonwoven, which obviously requires from a leader in nonwoven like Suominen to become more and more competitive. Therefore, also, the search and the program that we have launched at the end of January. We have a leading position because we are located into the right countries and countries where there is a need for more local supply. Customers are looking more and more. This is not just linked to the after COVID, if I may say, where the supply chains have been much more regionalized to localized.
We really have markets which are locally undersupplied. I 'll take an example. Brazil, for instance, is at 60% supplied with imports, which means that local supply, local domestic production is too short of the local demand, and therefore there is space for growth in the future. We have renewed the management, as I said. Why? Because we have raised this transformational agenda, and we need a new leadership and a new operating model to drive this transformation. It's extremely important, obviously, people in business. It's not only about people, it's also about the what we are going to do and how we're going to do it. For instance, while there has been probably a tendency of volume over margin over the past, we have shifted to margin over volume.
Scaling the company will come, it will come later once we have resetted our profitability. The Full Potential Program is what I would like to now explain you in more details. It's really around three pillars. The operational performance improvement is number one. Second, we will go over the next couple of years for a couple of targeted investments in low-risk areas, and then some structural profitability measures complement this program. Let me take you now through this profitability resetting program that we have. We call it the Suominen Full Potential Program. Very quickly, the why we are doing that, well, it's relatively simple. The performance of the company in the after pandemic.
If you start from 2022, this is pretty visible in the chart which you see projected on the slide, it shows that after the extremely high demand of the COVID pandemic period, the company went down in profitability because of this oversupplied market and also oversupplied capacity at Suominen, which has meant last year to shut down one production line. The growth has been, if we look at a long term, almost 10 years timeframe, has been a minus 4% CAGR, which is obviously not the right trend. The profitability went from a 10%-ish level in terms of EBITDA margin to 3% over the last four years, that's where we said, we need to change this trajectory. It is extremely important because our customers want to work with Suominen.
They value Suominen as an innovation and sustainability leader. At the same time, they want to play and work and partner with a supplier that is reliable in production and consistent in supply, which probably has not been the case in the recent past. We have the chance to have almost 700 employees who have a strong engagement, a strong passion for the company, strong tenure also in the company for many, and they have faith into the management and into the direction that we are giving to the company now to revert to better days. Also, well, to you, shareholders, investors.
Well, obviously, investors expect a return to a share price increase and a return to dividend, which has not been given for now two years in a row, and that is what is due. Therefore, this Full Potential Program is aiming at transforming the company in terms of how we do things, but also what we deliver. Looking at it in a very schematic way, what are we seeing for the mid to long term? We're seeing basically two periods, and we're going to talk specifically today about the phase I, not about the phase II.
The phase II, which is going to be about scaling the company in the future, will come, but it will come once we have reset the company to the right profitability level into a healthy cash generation and into delivering consistently to our customers, to our employees, and to our shareholders. Our ambition through this period, which we are calling the period of resetting the profitability level, aiming at 10% EBITDA margin. The ambition is not only profitability. Is number one, as a license to operate, to become a zero-accident company. I want to say that our performance in safety is really good. We had only seven accidents all together in 2025. That's a good performance, but as long as there is one accident is one accident too many. Therefore, our ambition is zero accident.
We want to be a quality leader for our customers. We want to be reliable in supply, consistent, delivering on time in full, we want also to be delivering profitable growth, and number one, profitable. We want to continue investing, of course, in innovation, particularly in cooperation with our customers. We have some successful development or co-development with some key customers around the world and particularly in sustainability matters. As I said, if we do all this or when we do all this in the mid-term, we will offer return to our shareholders. I have mentioned now a couple of times that we have renewed our operating model and renewed our leadership. Let's be concrete. Renewed the operating model, what does that mean?
We were organized in a regional base with two regions, Americas and Europe, Middle East, Africa, which is absolutely fine as an operating model. Actually, I would say even recommendable in a company where the name of the game is continuous improvement. That's the best way to be well-aligned between production, supply to customers. We are not in that situation today. We are not in a situation of continuous improvement. We are in a situation of transformation. Transformation requires expertise and effectiveness. Therefore, we made the decision at the end of January to change the operating model by creating an engine into the company, a global engine into the company between operations and commercial operations. Manufacturing operations, commercial operations. We have created with this, with a new leader, François Gueta t, in terms of Chief Operating Officer.
We have created this line of command, direct line of command to procurement, production, and supply. He is managing directly the seven factories, the procurement and the supply chain. François joined us six months ago in November. On the other side, and working hand in hand, I have to say. The choice of people was extremely important in this case to make sure that we have teamwork and people working hand in hand. We have Markku Koivisto . Markku is well-known in the nonwoven industry. He has been eight years in our company, and he is the Chief Commercial and Technology Officer.
The title may surprise, but I think it's very powerful because chief commercial officer has a very clear resonance of managing globally the sales for our global accounts, but also in terms of commercial excellence practices to our local teams. The commercial teams remain local in each country where we operate close to our customers. That is extremely important to remember. Markku, with a past in technology, is also our technology officer, and this is a fantastic combination. The reason I believe it's fantastic combination is because every time I have been at customers, and it has been many times since I joined Suominen back in August 2025, well, the agenda at the table in our discussion with customers is, of course, all the commercial matters that usually customers and suppliers have to discuss.
Also it's all about what innovations for the future, what does it mean convenience? What does it mean hygiene? What does it mean quality improvement? What does it mean sustainability development? Therefore, the technology aspect is permanently at the table with customers, and I thought this was a natural, while surprising, a very natural and powerful association. The other executives in the team, Kimmo Raunio, as introducing at the beginning of the meeting, is our new CFO. He joined actually yesterday, the company. Very pleased to welcome Kimmo in the company, while thanking Janne for amazing job until now and until mid-June. Liisa Pursiheimo , who is our new Chief Human Resources Officer. She joined on the 21st of April this year. Marika Väkiparta , who is our Chief Strategy and Transformation Officer. She is also our interim general counsel.
She joined the company in September 2025. I think very powerful, streamlined team. You know, it's a small team, acting together, knowing well, for many of us, the U.S. market. We are all basically centered around Espoo, which means that the work is fluid, meeting together is fluid. For instance, Francois Guetat as a long-tenner in the U.S., Liisa Pursiheimo has 20-plus years in the U.S., which means that we are representing an experience, and I work personally also in Americas. We represent well our geographies. That's for the platform of who's going to lead the company. Now, what is it that we're going to do? The Full Potential Program is, as I suggested at the beginning, combining three pillars. Three very complementary pillars.
Number one is what I would call the sanity. It is how do we improve to the best of the current structure, the operational performance. The second is we will go through some targeted investments, which are framed already, but nothing is decided, and we'll come back later to this when it is relevant in time, and also when the operational performance will have started to deliver better results. Third, some structural profitability measures. What do we mean with operational performance? I'll come back to the content, you know, covering end-to-end operations, procurement, pricing, commercial excellence, structural cost reduction, and of course, manufacturing efficiency. In the targeted investments, I'll come back also to explain or suggest the frame of what we are seeing also in the structural profitability measures.
Those are the three pillars which will bring us to the 10% EBITDA that we have as an ambition from the 3% where we are today. We have, of course, a business plan, meaning we have evaluated each and every single initiative under these three pillars to estimate how much the impact will be. We believe at this point that operational performance will provide us a 3 percentage point, sorry, of EBITDA increase. The targeted investments, at least 1%, and the structural profitability measures, 2%. That is on top of the underlying business performance improvements that we have ongoing. It means that all together, it is a relatively safe bet to say that our ambition is reachable to get to the industry medium profitability of 10% EBITDA within midterm timeframe.
It's not going to be easy, obviously, but with the organization that we have, with the methodology that we are putting in place, and with the capabilities that we are embarking, we are setting the company up for success within the next couple of years. Now I'd like to take you through quickly, not in too much detail, each of these three pillars so that you get a better understanding of what is it that is going to contribute. First pillar, operational performance, that is foundational for the rest, if I may say, because if we don't have the sanity, obviously, well, it probably doesn't make sense to put more money into other activities. We are extremely focused already today in the execution. First point, operating model. I'm not going to repeat myself. Already said it's basically done.
I would not say that it's completely done at 100%, you know, at the next levels in the organization, but it's basically 80% executed. That is currently working well. You see many companies changing operating model, and it is, you know, relatively messy or at least confusing for many months. I have to say this has been beyond my expectations in terms of how smooth the organization has been playing with this new operating model, how customers also called me and say, "Charles, this is exactly what Suominen needed to do." In a way, this was a comfort giving that we are doing the right things at the right time for the right purpose. In terms of activities, fixed cost savings, you may have heard of by the company that in May 2025, a EUR 10 million cost saving program was launched.
I'm pleased to say that this fixed cost savings program is well underway. It's basically executed at 80%. We are confident that the EUR 10 million will be reached within 2026. Some of it has been saved in 2025, most of it in 2026. This is a high contributor to the operational performance improvement. Second, commercial excellence. Commercial excellence is a broad initiative which starts obviously with, you know, reinforcing our S&OP process with, building a new pricing management process in having a margin management, process in place also, and working also on opportunity management and business development initiatives, which we have also now, framed and, assessed and which are starting, in terms of execution.
The impact of the commercial excellence has been in our business plan taken in a relatively conservative way because it's kind of, not an unknown, but it's kind of such a broad type of activities that we believe the upside might be more than what we have put in our business plan, but better under promise and over deliver. Procurement is the next chapter, which is an obvious one. I would say that procurement it has been already in the past, a well-managed aspect of the company, where we have probably more, should I say, opportunities for savings is on indirect, supplies and materials and contracts.
Of course, we are, you know, uncovering all the stones and looking at all possibilities to reduce our procurement cost and the raw material, energy, and other supplies cost for the company. Finally, operations, which is like the fixed cost, looks into our business plan, the bigger part of the impact. Well, bigger part because it's also where this has been the lowest performance over the last, let's say, quite many years that we can analyze. There has been a lack of maintenance of equipment in the past, and we are restoring. I'll come back to that. We are restoring the equipment back to basic conditions in order to make our equipment more reliable in terms of output.
I mentioned about, you know, procurement objectives to reduce cost or to create more savings in terms of raw materials. It's also important to note that the biggest saving in terms of raw material cost is actually coming from the operations in the way we operate and manufacture our products by reducing the waste of material in our production processes. We have some factories with really best practices and some factories with, you know, relatively high upside, if I may put it like this. To do that, We have started to introduce the well-known TPM methodology, so Total Productive Maintenance, which is very well known in many industries, started in the automotive in the 70s. That methodology is proven.
It is a very effective methodology. It builds a sustainable continuous improvement on the long run. That's what is extremely important to remember. That will have an important impact. That's about the chapter of operational performance improvement for the company. Second, pillar is targeted investments. I think I mentioned already that when we say targeted, there is a reason why we say targeted. It's because we want to go for a relatively low impact, low cost CapEx in low risks areas where we know that the return is a very high probability of success. We have three categories. All are linked to problems we want to solve.
The first one goes through all the factories, but some particularly more than others, particularly in the U.S., where we need to restore the factories, the equipment, back to the basic conditions of manufacturing and operational reliability. We have had, in the past, too many operational instability. The proof is in one of the factories, for the ones who were following already the company in 2025. In July last year, we had a relatively dramatic incident in one of our U.S. factories where one line was interrupted in production for two months and a half.
That should not happen if we have the equipment restored to basic conditions, and second, if we have preventive maintenance, which we didn't have in terms of manufacturing process. That will require obviously some limited but still increased investments, but it will drive much higher output while also improving the raw material efficiency, therefore reducing the waste. That drives, of course, more output means more margin, and therefore the payback or the return of this initiative is very clear. It's more that this is an initiative that will take time. It's not an investment that you plug and then overnight it changes the condition. It is a much more of a taking, probably the next three years to do. We have started already and with focus in the U.S.
Second, we want to unlock growth in the highest profitability unit. I, you know, suggested Brazil before saying that, for instance, Brazil is a country which is undersupplied by domestic production. We are the leader with more than 20% market share in Brazil, but we could be, you know, growing more in Brazil, for instance, if we had more capacity. We're looking into solutions to upgrade our equipment without putting new lines in place. There is no plan for huge capacity expansion which would mean huge CapEx also. We are looking for intelligent ways of increasing our possibility to grow and we believe that we have a path to it. That's the second chapter in this investment pillar.
The third one is about improving through some targeted investment, improving our raw material efficiency, particularly when the setup, the production setup, is today not the optimal one from a waste generation point of view, meaning that we have opportunities to reduce waste mathematically a lot by changing something in the production setup. We have an investment in line of sight from that point of view. All of these are relatively limited investments when it comes to CapEx level. It is very targeted, and it is also, I would say, low risk in terms of how much are we sure about seeing the return within one to two years. That's why we have chosen to focus on those investments going forward. Not decided.
It will be decided later, either in 2026 or later in 2027. As I said, first focus is on operational improvement, operational performance improvement. The third pillar, the structural profitability measures, will be particularly about focusing on reducing our low profitability volumes. We have some low profitability portfolio and also reducing our fixed cost further in some other areas than our direct personnel and organization. First of all, to reduce the exposure to low margin volume, the first thing to do is to increase our installed base utilization because obviously if we have lines which are not enough utilized, or where the OEE, so the Overall Equipment Effectiveness is too low, then obviously the cost that we are sharing with the volume is not ideal and can be improved.
The increase of the installed base utilization is number one. Number two, we need to have a conscious and structured and systematic way of working on our portfolio profitability because a part of the market, a part of the portfolio is relatively commoditized. I said that there is a low-cost countries supply and therefore competition. The name of the game for Suominen is to work into value add products, innovative products, more sustainability, more functionality, more convenience, and working with these categories that offer a better margin than just going for the cost one. That's for the first part of reducing the exposure to low margin volumes.
We will also address some burden we have from some fixed costs and other contract structure that we have developed over years, which are not ideal. We will address this through different actions, addressing those particular those contracts through, for instance, a contract free negotiations and other more structural actions on our install base. That is planned to deliver about 2 percentage points of improvement on the EBITDA margin. That's for the activities, the what we're going to do. I said a bit also about the how we're going to do it. At the end of the day, it needs to drive the company to have also a healthier financial situation, and that there are, I mean, the balance sheet.
The balance sheet today is not solid enough. We have a leverage of 7 times EBITDA in terms of net debt. Major part of this is not that we have too much debt, it's more that we have too little EBITDA. All this focus on the profitability of the company. Also short term, we need to generate more cash in order to improve the balance sheet, reduce the financial cost, and therefore have more space to maneuver into our transformational plan. That's why we have decided to offer and plan for a rights issue that will help, that will be the first wave, the one-time wave of helping our balance sheet immediately.
The pillar that you saw of operational performance improvement will drive better cash flow, and that should drive us midterm to be at a leverage in the corridor of 2-3 times EBITDA. That is what we are ambitioning as minimum target. We have some upside potential also, that is not directly in the management case, but beyond, which could drive us to 1.5-2 times corridor in terms of leverage. Now let's focus on the rights issue because that is the reason why we are in this meeting today. We are therefore contemplating a rights issue to raise capital in the amount of approximately EUR 28 million gross.
For that, we have made the announcement yesterday of this offering, and we have also invited yesterday for an extraordinary general meeting of shareholders that will take place on the 8th of June. Obviously, the board of directors following the EGM authorization will work and decide on the terms and conditions of this capital raise. The reason I explained already, but repeating that, you know, why do we need or how are we going to use this capital raise? Well, that's basically two things. Number one, strengthen the company's capital structure. Second, it's about accelerating the e-execution or enabling the execution of our Full Potential Program and what it means for the three pillars that I was just explaining.
Next to this is really important to say and to know that, you know, I have said many times in different investors meetings presenting quarterly results that we are blessed to have two anchoring shareholders in the name of Ahlström Capital and then the Etola Company that represent together 49% of the shareholding. We are blessed because they are the number one supporters. First of all, because they are long-term oriented, so they are at Suominen, they believe in Suominen, and they are there for the long term. Also because in this particular case, when we as management have presented our proposal to plan for a capital raise, they both support the idea.
Not only they support, but also, they have decided to commit the underwriting, in case it would become necessary, the underwriting of this capital raise. The banks following us and supporting us, which I take the opportunity to thank in this meeting, are Danske and Nordea. They are arranging and supporting us, helping us with the entire process. Ending up with just a few dates, which I guess are repetitions compared to what I said. The EGM invitation was sent yesterday through stock exchange release. The EGM will take place unless otherwise on June 8 next month.
The details of the right issue are still, of course, to be decided and announced in terms of terms and conditions. The subscription period will be basically in June after the EGM until very early July. That's what I had planned to tell you now. I think we kept quite some time for in the session for you to ask questions if you may have. I invite my colleagues, Kimmo, Janne, and Anu, to be back into the meeting so that, you know, we can take your questions if you have. Thank you for listening.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question please dial pound key six on your telephone keypad. The next question comes from Joni Sandvall from Nordea. Please go ahead.
Thanks. Thanks, Charles, for the good presentation. Maybe one question on the commercial excellence side. You were speaking about, you know, let's say commoditized products, with let's say lower margin profiles. Could you give a little bit more color on any time frame when we could see, you know, improvement in let's say in your mix from this side?
Yeah. Thanks for the question, Joni. You know, this is like I said, maybe not on this, on this particular topic, but on other topics, it's not an overnight turnaround. Yes, part of the portfolio and part of the market is commoditized. What means in commercial excellence is the number one thing that, yes, has happened already, and that was overnight, is to say we need to be much more systematic and structured into analyzing our portfolio, where we make the right level of margin so that we keep our customers being competitive, but we are also as profitable. We need to be very clear where we are not making money or not enough in order to support the company's future.
Based on this, once you have made that honest and conscious analysis and keep it as a process for the future, then some decisions have to come. But a decision to, you know, exit eventually a product requires that you gain another product or another customer and so on. That's why I'm saying it's not overnight. Your question is, when are we going to see impacts of this? I would say incrementally, we are slightly starting to see first effect, but where are you going to see it into the P&L? I would say 2027.
Okay. Okay. That clear. The second question may be part of inflation topic what it has been on the, on the market. How do you view the current competitiveness of the company with, you know, elevated gas prices, for example, in the market?
Elevated. Sorry, elevated?
For example, elevated gas prices and other raw materials in the market.
Yeah. The inflation is I would say twofolds. There is the inflation of all the input costs, and that's particularly in this current period of time because of the geopolitical situation. Inflation in the market, meaning inflation into the finished products at consumers, that is impacting potentially consumption. I would start with this second point. I'm not expecting that the inflation will have an important impact on the types of products that our customers are selling with our nonwoven because those products are daily necessities. Okay. It's not nice to have. When inflation is there and it's the wallet of consumers, and I talked about middle class, the middle class is starting to cut on, you know, tourism, other expenses nice to have, not on everyday necessities.
We are playing in that category. The inflation may have an impact, but not that dramatic. On the other side, which is the value chain inflation currently on the raw material and energy, we have the chance to be in an industry where to have had in our legacy business, contracts with customers where we pass through basically most, if not all of this inflation on raw material and energy cost. When it is a period of time like this one where even supply is a concern, the number one concern from customers today is supply because of the logistic concerns, then it's an easier time to pass through the additional cost. It is a concern in managing the day-to-day business, but it's not a concern whether we are able to pass through that inflation.
Okay. Thanks. That's all from me.
Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no phone questions at this time, so I hand the conference back to the speakers for any written questions.
Thank you. Let's take the questions submitted by the participants through the chat. First, there's an overall question. If everything goes as planned, when will shareholders see performance improvement?
I suggested a little bit already in the answer to Joni, but also in the presentation that it's not going to be overnight. It's, we're going to see incremental improvement already in 2027. First of all, in 2026, our plan and our outlook in 2026 is to deliver a better profit generation than 2025. From a Full Potential Program perspective and delivery, it will be more visible in 2027. I would say based on a number of initiatives that we want to take, particularly linked to the pillar two, targeted investment, and pillar two, structural decisions, we will see more of the upside towards 2028 and forward.
Next question, could you elaborate on which parts of the Full Potential Program’s expected profitability improvement do you consider low risk, and which parts do you see as carrying higher execution risk?
I would say that our view is that the impact we have evaluated is relatively balanced in terms of the risk level. The reason I'm thinking about it is because usually investments by definition carry an important risk. In this specific case of the Full Potential Program, we have decided to prioritize cases where we see a low risk in terms of our capability to do it and execute on the plan, but also the context, meaning, you know, how much demand do we see and do we know already or how do we have under control the improvement that needs to be put in place thanks to this investment, depending on the investment we're talking about. I would say it's very much balanced. I would give a different answer saying which one is the most important of the three pillar?
Well, the number one to start with, because that's the sanity we need to drive into our business. If we have the sanity into our business end-to-end into our operations, manufacturing operations, into our commercial operations, into our structure, then we will be allowed and able to drive much more improvements, and scaling the company going forward.
We have a question from Jonas Ilvan and from Evli. If Brazil is your most profitable unit, then what's its EBITDA margin difference to the second most profitable unit? What portion of Americas' sales is currently attributable to Brazil?
Well, we are not disclosing numbers by country, I'll not answer in detail this question. Partly because I don't think markets as distant as U.S. and Brazil are comparable also from a market price point of view, from a consumer point of view. What I said is this, we have three things in Brazil. We have, what I said before, an undersupplied country market domestically. There is too little capacity in the market with our competitors, but also with us, even though we are the leader in the market. That's a first point. Second, indeed, we have a very good profitability. Third, we have an extremely well-working factory in Brazil.
It is a factory that works well since many years. There, I would reveal one thing, why we are, I should say, optimistic about our overall transformation plan is that our unit in Brazil has been through that transformation, some five, six years ago, and therefore, it is our benchmark. It is our benchmark in terms of what to do, how to do things. It is a very safe factory, which recently actually celebrated 5,000 days, if you can believe, 5,000 days without a lost time accident. All the performance is of this kind of level, record high.
Another question about Brazil from Jonas. How is the current product mix in Brazil? Is there any significant tilt to sustainable products versus other markets?
Yeah, that's a good question. If we look for the sustainability aspect, the most drive for sustainability, which is linked to culture consumers, but also legislation is in Europe. It's not directly in Brazil. In Brazil it starts, but it's not a number one driver. The first driver is to drive more convenience for consumers, develop the use of advanced products like wipes for babies, for, you know, feminine care, for elderly people, for domestic use, and so forth. The concept of the single-use product versus the reusable is what is driving the growth in Brazil more than the search for sustainable products. At this point, it will evolve.
Finally, we have a question from Rauli, from Inderes. How do you see your competitive position longer term versus low cost competitors given your production is mainly in high cost countries?
Yeah, good question also. Let's say competitiveness is not just a matter of cost. Okay. Competitiveness is also a matter of innovation capability, quality of product, quality and reliability of services, proximity and lead time also to your customers. Flexibility. Many customers are looking for flexibility for, you know, what we would call, you know, rush orders, because there are some evolutions in the market that require rapid lead time. It's not only about cost, and that's exactly the point about competitiveness. We need to be operating in the right markets with the right customers who value a domestic, good quality, good service supply, so that it's not only about a cost game.
A pure cost game is not a game that should be our ambition because there will be low-cost countries that can do better on that side. That's not our ambition. Our ambition is to be better end-to-end as a company.
That concluded the questions from the chat. From my side, I would like to thank all the participants and also, of course, the Suominen managers for this webcast.
Thank you for your participation.
Thank you.